- Wednesday, October 16, 2024
Shares of biotech company Vertex Pharmaceuticals experienced a 9.5% decline over the course of three trading days this week. The drop came after the company's chief operating officer made a statement regarding the trial of their new pain pill, VX-548. According to the COO, the trial did not include a placebo group for comparison.
The results of the trial have not been disclosed yet. VX-548 is an experimental non-opioid pain pill that was highlighted in an early November feature. Analysts on Wall Street view this drug as potentially transformative for the company. However, it must first succeed in clinical trials, which has proven challenging for previous non-opioid pain medications.
Investors reacted with concern to the Vertex executive's statement, fearing that the trial data may not convincingly demonstrate the drug's efficacy. Michael Yee, an analyst at Jefferies, stated that investors worry it may not be well regarded or received due to the absence of a placebo arm in the study design.
Although the information provided by the Vertex executive was already publicly available on a government registry, investors were disappointed by the description shared at a Jefferies investor conference. This disappointment led to a selloff, causing Vertex shares to drop 2.4% on Tuesday, 5.6% on Wednesday, and an additional 1.8% on Thursday.
While shares experienced a slight increase of 1.6% to $348.64 on Friday afternoon, they remain significantly below their Monday closing price of $378.92.
VX-548 works differently from traditional pain medications as it blocks pain transmission in the peripheral nervous system rather than in the central nervous system. The drug has the potential to replace opioids with fewer side effects and no risk of addiction.
Vertex Testing VX-548 for Acute and Chronic Pain
Vertex is currently conducting tests on the potential of VX-548 as a treatment for both acute, short-term pain and chronic pain. The focus of concern among investors is the Phase 2 study being conducted on patients with painful diabetic peripheral neuropathy. This study involves patients who suffer from the chronic condition that often develops in diabetic individuals.
Although the study has been completed, Vertex has not yet released the results or made any official announcements regarding them.
During an investment conference, Stuart Arbuckle, the COO of Vertex, explained that instead of utilizing a placebo arm in the trial, the pain levels experienced by patients who received VX-548 would be compared to their own pain levels prior to taking the drug.
Arbuckle also mentioned that while some patients in the trial had already been treated with the nerve pain drug Lyrica from Viatris (VTRS), there were not enough patients to conduct a statistical comparison between the effects of Lyrica and any of the dose levels of VX-548. However, the data from the Lyrica arm of the trial will be used for future trial designs, providing valuable context.
Dr. Yee, another participant at the event, pointed out that investors typically prefer to see drugs compared to a placebo for reference.
"Wall Street's like, is it as good as the control arm?" he said. "They want to use it as a reference point, and so people are trying to look at that."
In response to Arbuckle's comments, analyst David Risinger from Leerink Partners expressed concern about the lack of a placebo arm, stating that it had a negative impact on investor perception. Despite this concern, Risinger remains optimistic about the drug's potential.
When contacted for comment about the new investor concerns, Vertex did not immediately respond.
Fortunately, investors won't have to wait long for the trial results. Arbuckle revealed that the data will be released by the end of the year.
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